Libra is in the spotlight. Everyone is talking and speculating about it. Do we even know what it entails? Are we ready for such financial and societal change?
Financial exclusion is still significantly high worldwide. The World Bank highlights in Financial Inclusion on the Rise, But Gaps Remain, Global Findex Database Shows a research paper from 2018, that approximately 30% of adults overall in the world do not have a bank account. This issue is even more seriously present in developing countries and in the case of women as pinpointed by Facebook Newsroom. Calibra, the new digital wallet aims to solve this challenge and provides an innovative solution by enabling anyone using internet connectivity on a smartphone to make transactions or to pay for goods with Libra.
The worldwide famous social network plans to launch these services for such global currency in 2020 if it passes all legislation by then…. useless saying that it won’t be an easy task.
“From the beginning, Calibra will let you send Libra to almost anyone with a smartphone as easily and instantly as you might send a text message and at low to no cost”Facebook Newsroom
Despite being Facebook’s own cryptocurrency, Libra will be separated from the social media platform’s other activities, which is not only ethically correct but also a wise decision from a marketing point of view after the Cambridge Analytica scandal in 2018. Moreover, multi-layered privacy protection will be guaranteed in one’s Calibra account, just as it is in the case of any bank, or financial services, doing this by using passport verification, fraud-detection and automatized protection such as FaceID or touch identification.
Furthermore, Calibra will follow-suit every legal steps and authorisation process to prevent criminal activities as well.
“From the beginning, Calibra will let you send Libra to almost anyone with a smartphone as easily and instantly as you might send a text message and at low to no cost,” the Newsroom website notes. Transactions will be possible on Messenger, WhatsApp, or Libra’s own standalone app.
When Blockchain technology…is not really decentralized
Some may wonder: “what happens if one loses his phone?” A live support team will take immediate action, and those spendings that had possibly been done in the meantime by a third party will be fully refunded.
One may therefore conclude that decentralised networks transform traditional financial protocols into transparent activities doing all this without unnecessary intermediaries. But is the Protocol used by Facebook truly decentralized? Or say it differently, is Facebook using Blockchain technology?
Techies will argue that the Libra Blockchain is not really a blockchain since it is based on a cryptographically authenticated database and not a series of cryptographically linked blocks…and they are obviously right.
On a lighter note though, the development of Calibra is still in an early phase. The ultimate goal is to make an easy-to-use platform that provides safety and security for its users in the form of non-governmental issued money.
Facebook might face some difficulties gaining back the trust of users after Cambridge Analytica. In this specific case indeed, not only users’ private information but also their hard-earned money would be at stake. The question remains open, would it eventually be launched by 2020?
It is hard to predict whether it passes national legislations.
Escaping….a sinking boat?
According to the BBC News, Mastercard, eBay, PayPal and Visa have already withdrawn from the Libra project, claiming that the reason behind their decision was ’regulatory uncertainty’. However, Facebook’s executive in charge of the Libra project said earlier this month that losing the backing of major firms was “liberating“. David Marcus added: “You know you’re on to something when so much pressure builds up”.
Marcus must surely refers to the half dozen of companies fleeding the boat and bringing with them a mere net income of USD$ 30Bio all together. Yes, this is pressure..
The world’s undevided attention is not only on Facebook now but on the other companies part of the Libra consortium as well.